South African ICT resellers and systems integrators have a shrinking window of opportunity to position themselves in the software-as-a-service (SaaS) world if they wish to remain relevant in a rapidly-changing market.
This is especially true in the new world of work created by the need for more people to work remotely.
This is according to Peterjohn Bishop, Sage’s vice-president for partners, accountants and alliances, who was a speaker at the recent Thrive On SaaS seminar and workshop for Sage’s South African business partners. He highlights the significant revenue opportunity for the channel, but only for those who find ways to differentiate their offerings in an already altered market.
He says the rapid speed of the transition from traditional, on-premises business solutions to SaaS and other cloud-centric IT procurement models means resellers that have not started to pivot their business models are in danger of being left behind.
Growth north of 30% a year
Jonathan Tullett, senior research manager at IDC Sub-Saharan Africa, says SaaS adoption in South Africa is growing 30% per year, with financial services, professional services, and retail leading the race.
IDC research shows that the top three benefits South African CIOs look for from the cloud are new functionality, software replacement and business agility.
Bishop says the shift from larger software licence deals towards recurring, subscription-based revenue means resellers will need to find ways to recapture revenue through differentiation.
Ways they could set themselves apart in the market include building new products or services or collaborating with other organisations to deliver complementary offerings and skills to SaaS customers.
Kevin Derman, the CEO of Kaskade Cloud, says the time to move to the cloud was yesterday. “Embrace it – don’t be afraid of it. If you are a partner, your ability to add value on top of SaaS is huge.”
Derman notes that channel partners will need to deliver value to thrive in this ecosystem going forward.
CX is the new competitive edge
Adds Bishop: “Business customers want better outcomes from technology, and they want it faster. SaaS can deliver on this expectation, but it necessitates new approaches to achieving customer success. Since business partners will be moving to a new kind of revenue model, they need new ways of measuring that success.”
To be successful in the new world of work, channel partners must rethink their sales approach, Bishop says. A successful journey to the cloud and SaaS will involve creating a roadmap for a transition to the new revenue model, expanding focus beyond the initial sale, and using metrics such as customer satisfaction and annual recurring revenue to understand performance.
To make an orderly transition to the SaaS world, Bishop recommends that channel partners focus on retaining on-premises customers to fuel their emerging SaaS business. They can focus on converting these customers to the new model, setting incentives to accelerate client buy-in. At the same time, they will need to retrain, recruit and rebalance their workforce for a new revenue mix.
As the SaaS business grows, they can leverage automation for engagement with clients, develop their own IP – particularly specialised solutions to complement SaaS offerings from their vendors – and partner up to build their own ecosystem. “The key to winning is the customer experience,” says Bishop.
“As Sage evolves into a great SaaS company, we will measure our success based on the success of our customers. That means creating enduring subscription relationships and having a customer-centric approach in everything we do. It is a journey we cannot complete on our own – and we’re excited to embark on it alongside our business partners,” he concludes.